Connecting Europe Facility
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Mr Hoban
We have made it absolutely clear that the rebate is there to stay, and that is one of the key parts of our negotiating strategy.
I want to say a few words about infrastructure spending. The Government have made it clear that focused infrastructure improvements are a domestic priority. When undertaken wisely, it is clear they can boost growth, protect the environment and improve lives. In his autumn statement, my right hon. Friend the Chancellor announced investment of £100 million in the creation of up to 10 super-connected cities across the UK with 80 to 100 megabits per second broadband and city-wide, high-speed mobile connectivity. Last week, the Secretary of State for Transport announced details of the new high-speed rail network.
However, the key is having carefully focused investment. When prioritising spending for infrastructure, the Government have taken the wider economic context into account. The urgent need to reduce our domestic deficit has meant that we have had to choose our investments carefully and focus infrastructure spending on where it can have the most positive effect.
That is the approach the Commission needs to take to European infrastructure spending, focusing affordable levels of spending where they will make most difference. Therefore, while the Government will, first and foremost, argue for a reduction in the overall size of the connecting Europe facility budget, we will endeavour to ensure that the final settlement agreed is focused on spending money where it will add most value. That means spending money only where neither the market nor domestic Governments are better placed to act—the point the hon. Member for Luton North (Kelvin Hopkins) made in his first intervention.
We will be pushing the Commission for additional information to allow us to judge where the money will best aid growth and support our environmental objectives. That is consistent with the Government’s desire to see spending that promotes sustainable growth take a bigger share of a tighter budget in the next financial framework. The ambition of the connecting Europe facility, while laudable, must respect the fiscal realities of Europe.
The Opposition have tabled an amendment to today’s motion. It is rather incredible, in a week when Labour’s policy on deficit reduction has become ever more confused, that the hon. Member for Nottingham East has tabled an amendment calling for an effective deficit reduction strategy. Ever since the shadow Chancellor said on Saturday that
“we are going to have keep all these cuts”,
the Labour party has been totally confused, with its deputy leader later saying:
“We’re not accepting the Government’s austerity cuts, we are totally opposing them”.
So Labour Members accept the cuts, but then oppose them.
Labour Members cannot say they are credible on the budget, because of the legacy they have left. Despite our entering the downturn with the largest structural deficit in the G7, the Labour leader told Andrew Marr this weekend that he did not think Labour spent too much. Let us remind him that it is because of Labour’s record on spending that our triple A rating was on negative outlook when the Labour party left office. That downgrade threat has been lifted because this Government have a credible and effective deficit reduction strategy. One would think that the Labour party would have learned from that, but, no—its five-point plan would add £20 billion to the deficit this year. Rather than seeing an effective debt reduction strategy from Labour, all we have is more of the same: more spending, more borrowing and more debt. So before Labour lectures anybody else on the deficit reduction strategy, it had better get its own house in order.
If that was not bad enough, the hon. Member for Nottingham East has scored another own goal in his amendment by calling for reform of the common agricultural policy—we touched on that earlier. We have heard brave words before from Labour politicians about CAP reform. Tony Blair said that
“the rebate remains because the reason for the rebate remains. Of course, if we get rid of the common agricultural policy and we change the reason why the rebate is there, the case for the rebate changes.”—[Official Report, 29 June 2005; Vol. 435, c. 1293.]
Those were tough words, but as we know, he gave way to the French, sacrificing €2 billion in our rebate a year, which will cost the country €10 billion over the lifetime of this Parliament. In the current financial framework, CAP spending has not fallen, as Labour said that it would, but increased by €3 billion. So it is all very well the hon. Gentleman talking tough in his amendment, but we have heard it before from Labour—all bark and no bite.
Achieving the priorities that the House has supported in the next financial framework will not be an easy task. The Government need to defend the rebate, resist EU taxes and restrain the budget size. The UK can deliver results in Europe, as outcomes in the 2011 and 2012 annual budget negotiations have shown, but to achieve our overall aims we must be constant and vigilant in our resistance to increases in the budget. A 400% increase to infrastructure spending in the EU budget, without any corresponding reductions elsewhere, is unacceptable in the current economic environment. We will work with our allies to cut this programme down to size, delivering fiscal restraint and value for money. Although we are clear that we need infrastructure investment to boost productivity and growth, projects need to be effective and affordable, but the plans in the connecting Europe facility proposed by the Commission are neither. I therefore urge my hon. Friends to support the motion.
Madam Deputy Speaker (Dawn Primarolo)
I inform the House that Mr Speaker has selected amendment (a), in the name of the hon. Member for Nottingham East (Chris Leslie). I call him to move the amendment.
Madam Deputy Speaker (Dawn Primarolo)
Order. Could those Members who are not staying for the next debate please leave the Chamber quickly and quietly?
Energy and Climate Change
Baroness Primarolo Excerpts(12 years, 11 months ago)
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Madam Deputy Speaker (Dawn Primarolo)
Five Members wish to take part in this debate, so a time limit of six minutes has been set. May I remind the Minister that the time allotted to him to respond to the debate is up to 10 minutes? The timings this afternoon are tight, and we want to make sure that every Member who wishes to participate in debates has the opportunity to do so. We will therefore be grateful if Ministers co-operate as well.
Glyn Davies (Montgomeryshire) (Con)
I have spoken about wind farms in mid-Wales before, in particular in a Westminster Hall debate on 10 May, which I secured. It is the dominant issue in my constituency, and in the neighbouring constituencies of the hon. Members for Ceredigion (Mr Williams) and for Brecon and Radnorshire (Roger Williams), who are not present today.
I am sceptical about onshore wind, and have been for a long time, and an increasing number of MPs have been contacting me since the Westminster Hall debate to tell me that they agree. I do not want merely to repeat the points I made in May, but I must outline why I am sceptical about onshore wind and why I am so implacably opposed to the mid-Wales connection project.
The cost of the huge subsidies involved is a matter of great concern, particularly to the poorest citizens in our society. Between 5 million and 6 million people are already in fuel poverty, and they are facing a choice between heating or eating. This is, in effect, a Robin Hood tax in reverse: the poorest people in society are having to pay additional sums in their energy bills and that money is being transferred to huge, powerful companies.
There is also an impact on business competitiveness. Some 1 million young people are unemployed in our country—that is 1 million lives scarred by the scourge of unemployment. We are doing what we can to find jobs for those people, but we are making matters worse by undermining competitiveness and driving jobs overseas.
There is also the impact on the landscape, which is particularly important to me. History in Wales teaches us the cost of thoughtless development. We had coal spills dumped all over the valleys, which this generation has had to pay to clear up. We have had irresponsible coniferous forestation, which caused massive environmental problems, and which this generation has also had to clear up.
I am particularly concerned about the scale of what is proposed in mid-Wales—the sheer horror of it. The mid-Wales connection is based on the largest ever onshore wind development in England and Wales. Under the proposals, permission will be granted for the erection of about 500 new onshore wind turbines in mid-Wales—the final figure depends on their size—over and above the 250 that currently exist and those that already have planning approval. There will also be a 20-acre electricity substation and about 100 miles of new cable, much of it carried on steel towers 150 feet high down one of the narrow valleys that lead from mid-Wales to Shropshire. It is scarcely believable; the scale is almost impossible to comprehend. Not even the enemies of Britain over the centuries have wrought such wanton destruction on this wonderful part of the United Kingdom.
However, today I want to speak about the impact of wind farms on democracy—that great invention that is the foundation of Britain’s constitution, and which is being disregarded so casually throughout Europe. I wanted to entitle this speech “Wind farms and democracy in mid-Wales”, but I felt that that would be deemed too tendentious.
In his response to my speech on 10 May, the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry) offered some reassuring comments. In referring to wind farm development, he said that
“it must be in the right location, and it must have…democratic support”.
He warmed to this theme, saying that
“too often, onshore wind is imposed on communities that do not want it. I am keen to ensure that we address that democratic deficit…in our plans.”
He went on, adding with a flourish that
“it needs more democratic legitimacy than it has today, and I intend to ensure that that happens.”—[Official Report, 10 May 2011; Vol. 527, c. 365-67WH.]
I was much encouraged, not surprisingly.
In my speech on 10 May, I also referred to a public meeting in Welshpool, to which 2,000 people came. I asked those people to come with me on a three-hour journey to Cardiff to express their views to the National Assembly. A few weeks later, they did—2,000 of them, on 37 buses. It was the best protest ever seen outside the National Assembly. That is how strongly people feel, and as a result the First Minister changed his position on the maximum cumulative impact that could be allowed in mid-Wales. He said that a new 400 kV line and a substation were not needed. We were generally encouraged, but then the giant energy companies got to work, the way dark forces do in science fiction. These massively powerful wind farm companies—leviathans fattened on public subsidy—got to work with a mixture of threats to people and community payments, which is a way of securing support for their proposals locally. A terrific amount of pressure was applied, and there was a huge lobbying exercise.
Members can imagine my shock and disappointment at reading a BBC report two weeks ago which said that more wind farms and pylons may be built in Wales in the national interest, despite local protests. The very same Minister whom I quoted earlier was quoted as saying that
“this is a national decision…the local views are important…but at the end of the day we are making decisions in the national interest”.
In the national interest—that is autocracy, not democracy.
Even more shocking is the pressure being put on local planning authorities. They are being pressured into deciding on applications by a particular date, and conditions have been ignored. They are told that all the conditions that would apply to any other planning application must not apply to wind farm developments. Transport infrastructure, ecological and environmental information, power usage—none of these factors is known, and yet they are being pressured into making decisions. It is utterly outrageous.
Norman Lamb
I will not, because I am conscious of time constraints and think that I must press on.
The hon. Members for Daventry and for Montgomeryshire discussed wind energy. First, it is important to recognise that this does cause concern for many people; we are all familiar with that in our own constituencies. Those concerns cannot just be dismissed. There are inevitably tensions between the absolute imperative of reducing carbon in our economy and the concerns of local people. It is important to recognise, though, that applications are turned down on landscape grounds. The key is to find appropriate locations in terms of landscape and wind speed.
The hon. Member for Daventry raised concerns about the efficiency and effectiveness of wind energy. Wind energy is generated for between 70% and 80% of the time. It is already providing about 2.9% of total energy generation—that was the figure for the second quarter of 2011—and it represented approximately 31% of the overall renewable electricity generated in that period. It is already delivering results. The costs of onshore wind are expected to come down by about 8% to 9% between now and 2030. That will result in support for onshore wind reducing by 10% from April 2013. The hon. Gentleman also raised concerns about the proximity of wind turbines to where people live and the importance of local decision making. The Government, through the Localism Act 2011, want to give people in their communities a greater say in the decisions that are taken.
The hon. Member for Montgomeryshire raised particular concerns about what is happening in his own community. I pay tribute to the passion and commitment that he has demonstrated on this issue over a long period. He will be aware that the location of wind farms in mid-Wales is down to TAN 8—technical advice note 8—which is the responsibility of the Welsh Assembly Government. Any changes or variations to TAN 8 are their responsibility rather than that of the UK Government. Six applications for developments of over 50 MW are currently in train in mid-Wales, and we are waiting on the response of the local authority, Powys county council, which is due by the end of March next year. The Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry) has written to the authority recently—last week, I think—to extend the deadline to the end of September so that it can conduct its assessment properly and respond fully to the proposals. That extension is subject to approval by the applicants.
I should also mention the Localism Act 2011, which has removed decision making powers from the Infrastructure Planning Commission. That body has dealt with applications for developments of more than 50 MW since April 2010. It was introduced by the previous Government and it was an appointed, unaccountable quango. This Government have returned responsibility to Ministers, thereby reinstating clear accountability.
I want to reiterate the value and importance of wind in meeting climate change targets, for the reasons that I have already expressed. It has to be part of the mix. I stress its economic benefits in Wales and elsewhere. Wind energy contributes £158 million directly to the Welsh economy every year in turnover, employment and expenditure. It is responsible for more than 800 full- time jobs in Wales, and that is expected to rise to 1,000 next year. That must be considered.
Finally, I will deal with the contribution of the hon. Member for South West Bedfordshire (Andrew Selous). I am grateful to him for raising the concerns brought to his attention by Mrs Lorraine Bond. The amount that she and others have to pay over the winter just to heat their homes should concern us all. He is right that the recent Office of Fair Trading report highlighted that cylinder liquefied petroleum gas—
Madam Deputy Speaker (Dawn Primarolo)
Order. Minister, you have now been speaking for 12 minutes, which is more than “up to 10 minutes”. I would therefore be grateful if you brought your remarks to a conclusion as quickly as possible, and if you could remember to address the Chamber, not the people sitting behind you.
Norman Lamb
I am grateful, Madam Deputy Speaker. I will bring my remarks to a close quickly.
The concern is that the consumers we are talking about are mostly on very low incomes, are often elderly and struggle with their heating costs. I will talk about the steps that the Government are taking. The Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden wrote to the OFT recently, asking it to consider how to make markets work more effectively for vulnerable consumers.
Park homes will shortly be able to receive help under the Government’s main home energy efficiency scheme—the carbon emissions reduction target. CERT requires all domestic energy suppliers with more than 50,000 consumers to reduce householders’ carbon dioxide emissions by promoting low-carbon energy solutions. Under CERT, suppliers are free to decide what measures to promote. I recognise that suppliers have chosen not to install measures in significant quantities to date, but there have been successful trials this year of park home insulation solutions that significantly reduce energy use. Those trials have shown what can be achieved. Solid wall insulation for park homes will get a formal carbon score under CERT, which will incentivise energy suppliers to promote these measures to park home residents during the final year of the CERT scheme.
Finally, I have taken on board the concerns raised by the hon. Member for South West Bedfordshire about the renewable heat incentive. It is clearly important to ensure that that matter is considered fully. The concerns that he has raised will be taken on board by the Department. Every effort will be made to ensure that these vulnerable consumers are protected as well as possible.
I thank hon. Members for their contributions and wish everybody a very happy Christmas.
Health
Baroness Primarolo Excerpts(12 years, 11 months ago)
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Madam Deputy Speaker (Dawn Primarolo)
Five Members are listed to take part in this debate. There is a time limit on Back-Bench speeches of six minutes. I remind Ministers that this is a Back-Bench debate and that the Backbench Business Committee has recommended that the time available for Ministers should be up to 10 minutes. Each time they go over that, they take time away from Back Benchers.
The Economy
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Charlie Elphicke
As the hon. Lady well knows, she and I debated the issue at length during the Committee stage of the Welfare Reform Bill. I know that Opposition Members sneer at this, but I think it important that child tax credits are rising by £135 next year. That is a move in the right direction. It is good that the lowest paid in the public sector are being protected from the pay freeze because they are disproportionately women, just as it is good that 1 million people are being taken out of the income tax system because they are disproportionately women. We need more action of that kind. The hon. Lady’s party had 13 years in which to take such action, but, as we know, child poverty sky-rocketed during the last Parliament. At least this Government are trying to take positive action in difficult times.
Hard-working families need to see stable finances, a stable Government and a stable fiscal position, because that is the only way in which we will bring back real growth. If we had continued to pursue the policies of the past, what would have happened to our country? We would have ended up as a basket case, like Greece, Italy, Portugal and Ireland. However, we had a credible plan, and we took firm action to control the deficit and sort out our national finances. We have made tough decisions that hit the least well-off, but also the most well-off. We are all in it together. Everyone is sharing the pain, more or less equally, and I think that that is the right direction of travel for the Government.
Members on the rowdy Opposition Back Bench may not agree with what I am saying, but the figures make it clear to me that we are working to create fairness. For instance, unlike the Opposition, we want to create fairness for motorists. By the end of next year, those who experienced such difficulty as a result of Labour’s fuel duty escalator will save £144 on the cost of filling up the average car by the end of next year. That is an important example of progress. The apprenticeship scheme has also been a real help to our young people after youth unemployment rocketed, particularly under the last Labour Government. [Interruption.]
Madam Deputy Speaker (Dawn Primarolo)
Order. Members do not have to agree with what is being said, but they do have to listen to it, and not continually interrupt.
Charlie Elphicke
Thank you, Madam Deputy Speaker.
In the last Parliament, youth unemployment in the shadow Chancellor’s constituency rose by approaching 150%, whereas in the current Parliament the rise has been much lower. We are having to try to turn around the supertanker to return to our young people the futures that were so disappointingly taken from them by the last Government. We need to look after the younger generation, and allow them hope for a better future.
Let me end by saying a little about what the Government are doing for east Kent. The South East England Development Agency spent £20 million on a business park project and created tarmac, but no buildings and no business park. Money was too often wasted. Now we have a local enterprise partnership that has already created an enterprise zone, which is important to a community that experienced difficulties after Pfizer decided to run down its research in the United Kingdom. That is real progress.
Our area has benefited from massive activism. The fast train service to Deal and Sandwich will help to improve the economic situation, as will the £40 million regional growth fund. I also welcome the £180 million catalyst fund that the Prime Minister announced the other day. Such things are very important. We have seen more economic activism in east Kent in the last year than we have seen in the last decade.
If we can establish the people’s port in Dover, it will give the community a sense of ownership, place and control of their destiny which will have an important impact on their confidence in us. East Kent is so often at the end of the line, a poor relation of the rest of Kent. I hope we can establish the people’s port project, and make it work so that it is a great showcase. If we make it a success, we will be able to hand back confidence and the idea of building a future, and thereby regenerate Dover, making it every bit as good as it can be so that it is once again a jewel in the crown of the nation.
Looking across the piece at what we are doing both nationally and locally in Dover and Deal, we can see that the Government have the right policies at the right time. They are making the difficult decisions that will pay off for us over the next decade or so.
Madam Deputy Speaker (Dawn Primarolo)
Order. There are still seven speakers who wish to contribute to the debate, so I am reducing the time limit to five minutes each. I ask each Member to pay attention to the clock, and to colleagues in the Chamber, so that they stand some chance of getting into the debate today. That is five minutes, starting with Mr Steve Baker.
Chris Evans (Islwyn) (Lab/Co-op)
We have heard the name of John Maynard Keynes again in this debate. My favourite Keynes quotation is the one in which he says that there comes a time when every Government have to indulge in “ruthless truth-telling”, and it is time that this House stopped acting like Nero when Rome was burning.
We stand on the edge of the abyss, and we have a eurozone crisis that is not being solved. Nothing seems to be happening. Greece is on the point of defaulting, it could exit the euro and it could be quickly followed by Spain, Portugal and, even, Italy. Yes, we might say, “We’re not in the euro: we’re little Britain; they can’t touch us,” but the key thing is that their bonds are held by British banks, and British banks will have to bail them out once again.
We have to ask ourselves, “Are we going to stand back and allow ourselves to sleepwalk into another financial crisis, or are we going to heed the warnings and do something about it?” Last week, when we had the autumn statement, the headlines were that the OBR had downgraded its forecasts, but what worried me more than anything, and what was not said anywhere or by anybody in the House, was that the OBR could not quantify what a crisis in the eurozone would do to the British economy. The best economists in the Bank of England could not even quantify or say what disaster might befall us if there were a euro crisis, and to me that is very concerning.
There comes a time with every Government when they have to put ideology aside. When Labour nationalised the banks, it did not do so because of ideology; nationalisation was 30 years ago and belonged to the past. It did so because nationalisation was a necessity and a practicality, so now, as we face the crisis in the eurozone, we have to put ideology aside, see what the practicalities are and put them into practice. It calls for the type of bravery that is rarely seen in this House, but, if we had to nationalise the Bank of England and bail out the high street banks again, we would be saying to our constituents, “If you have the dream and the hope of setting up a business, it ain’t gonna happen, because the banks are going to be even more cautious about lending to you,” and, “If you have a mortgage, you’re not going to be able to move it on to a lower interest rate, because the banks are not going to take that risk again.”
The problem is that, with every crisis, every politician will stand up and say, “Oh, it’s never gonna happen again. It won’t happen on my watch.” Even the Chancellor has said, “It won’t happen again. No, not while I’m Chancellor—no it can’t,” but the truth is that it can, because we have not learned the lessons of the previous financial crisis.
In my speech, I wanted to analyse the legislation that affects banking, so I looked, researched and went to the Library, but I could not find any. There was none at all, so we are facing another crisis with the same banking practices and with a Government unwilling to do anything.
One thing on which I agree with Keynes is that, “During a recession you do not raise taxes.” But what have the Government gone and done? They have put VAT up. It is all very well saying, “We’re going to create jobs,” but, if someone needs to drive to work and they are paying £1.33 for petrol and £1.41 for diesel, they might find it difficult to do so. If they are shopping and find that the price of their shopping basket has increased by 5% in the past year, they might not be able to afford food. Those are the decisions that people face.
I wish I had more time, but I will say this: the Government have an opportunity to do something. We need to look at skills and education, and to have a grown-up, adult conversation, asking, “Why are our young people leaving school not equipped to go into work?” I talk to people in my constituency with apprenticeship schemes, and they say that the kids are not prepared, so let us have an adult conversation and ask, “Why are they not prepared? What is wrong with the education system?”
The final point that we need to look at is tax reform. It is all very well the Government giving people a 1p cut in corporation tax, but when I speak to the small business man I find the thing that concerns him more is red tape. He asks me, “When I have a micro-business, why do I have to employ an accountant? Why can’t I have a simplistic tax form to fill in?” I wish I had more time to develop those arguments, Madam Deputy Speaker, but I will sit down now.
Harriett Baldwin (West Worcestershire) (Con)
How can I follow the wonderful, lilting oratory from the hon. Member for Islwyn (Chris Evans)?
It is very difficult to turn round a supertanker. The supertanker that my right hon. Friend the Chancellor inherited was weighed down by the lead weight of having to pay out £120 million a day in interest and artificially inflated by a Government who were spending more than they were taking in, so that, in effect, £1 out of every £4 spent was borrowed. There was a very challenging situation when the Chancellor took the steering wheel of the supertanker, and we need a significant process of change to alter its direction towards one where we have a much healthier public sector financial position and where the private sector is able to continue its process of growth. [Interruption.]
Madam Deputy Speaker (Dawn Primarolo)
Order. I am sorry to interrupt the hon. Lady. If Members want to have private conversations, they should leave the Chamber. If they are in the Chamber, they are taking part in the debate and they will listen to the person who is speaking.
Harriett Baldwin
Thank you, Madam Deputy Speaker.
I want to feed back to those on the Treasury Bench some of my constituents’ reactions to the decisions that the Chancellor announced last week in his autumn statement as regards the process of steering the supertanker. Those decisions were taken very much with a view to his understanding their impact on household budgets. Businesses and drivers in my constituency have welcomed the fact that the increase in fuel duty promised for January is not going to happen. Following the victory in Libya and acknowledged slower economic growth, they were expecting the price of oil to fall and the price of petrol and diesel at the pump to decline, but it has not. The increase in January would be extremely unwelcome for them.
My constituency has a very high percentage of people over pension age, who, needless to say, welcome the fact that they are to receive the largest cash increase in the state pension in history. They also welcome the Chancellor’s decision to allow councils to freeze the council tax for a further year, because for those who are on fixed incomes or receiving modest pay increases, not having to suffer that increase in their council tax is another significant help to their household budgets.
For the many small businesses in my constituency, the fact that the small business rate relief is to be extended until April 2013 is very welcome. The new initiative whereby larger businesses can defer some of the rate increase by 60% for two years will also greatly help businesses with their cashflows.
On the credit easing measures, I would like to draw the Chamber’s attention to an innovative idea in my constituency called ThinCats.com—presumably the opposite of FatCats.com. People can put their savings to work with ThinCats.com and it will lend the money out for them. It is one of the credit circles that are becoming increasingly popular. Credit easing is another way in which we will be able to get the benefit of lower interest rates into our business sector to allow businesses to receive help with their cashflow.
Finally, let me mention my concerns about the whirlpool that is offshore of the supertanker in the eurozone. The three possible outcomes that could occur are an underwriting of eurobonds, a break-up of the entire currency union, or the current uncertainty as we jolt from summit to summit with great promises and then huge disappointment. Of those, the current situation causes the worst damage to business confidence in my constituency. I therefore urge Ministers, as they go into these negotiations, to try to steer them towards one of those two alternative outcomes, which would provide some of the monetary stimulus that the eurozone needs and thereby a resolution of the current situation, which is the worst of all possible worlds.
Fuel Prices
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Madam Deputy Speaker (Dawn Primarolo)
Order. Before I call the next speaker, may I remind Members that when they rise to intervene they are addressing the House, not their colleague behind them, and they are to turn around and face the Speaker’s Chair? That will stop them saying “you”, because they will see that they are addressing me, and what they have to say has nothing to do with me. We will also be able to hear the interventions, which I have not been able to do thus far.
Andrew Percy
Does my hon. Friend think that those pretend employees would have been happy with the fact that the previous Labour Government escalated the fuel escalator?
Madam Deputy Speaker (Dawn Primarolo)
Order. We cannot have shouting across the Chamber. It is absolutely unacceptable, Mr Turner. We will have proper debate.
Andrew Bingham
My hon. Friend makes an excellent point, as he always does.
High Peak businesses suffer from rurality. We are midway between Sheffield, Manchester and Derby. The distances from our businesses’ customers and their suppliers mean that bringing goods in or sending them out costs more. My big concern is that as increases in fuel costs are borne more and more by local businesses, they will eventually say, “Enough is enough” and move out of the countryside into urban areas, further exacerbating the difference between the rural and urban economies.
We must remember that families are affected too. Although I understand that this debate is predominantly about fuel costs, I have to mention the increased energy costs that families are having to bear at the moment. I venture to suggest that High Peak is probably the coldest constituency in England. We have had a cricket match snowed off in Buxton in June, so we feel the winters, which are deeper and longer. That puts a further burden on family budgets.
Other Members have made the point that increased car use is required in rural areas. The proportion of households without a car in London is 43%, while in metropolitan areas it is 31%. In rural areas, only 10% of households do not have a motor vehicle. The reason is—
Fiona O'Donnell
No; the last interruption was not very satisfactory—I am not taking another risk.
I find myself in a familiar situation. I spoke in a similar debate not very long ago about a haulage company in East Lothian that was about to go bust because of fuel prices. I remember an hon. Member from somewhere on the Government Benches saying something about claiming back VAT. Unfortunately, I did not realise at that time that the company was not even registered for VAT, so that was not an option. The company has gone out of business and those jobs have gone. Others in East Lothian are trying to find work but the reality is that those jobs as a rule are not in the county—they are in Edinburgh. Given the poor local provision of public transport, they are forced to take to their cars. That is a real problem for making work pay for my constituents. If the Government are serious about getting people back to work they have to enable rural communities.
I am sorry that the hon. Member for Penrith and The Border (Rory Stewart) is not here. His contribution was not so much a speech as a postcard from some rural fantasy that he sent to the House. He spoke about how important this debate and this motion are, but I remember the last time there was a debate on this issue in which the will of the House was unanimously expressed—
Jobs and Growth
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Madam Deputy Speaker (Dawn Primarolo)
Order. I inform the House that more than 40 Members wish to participate in this afternoon’s debate, so Mr Speaker has applied an eight-minute time limit to all speeches from the Back Benches from now on.
Summer Adjournment
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Jon Ashworth (Leicester South) (Lab)
Let me begin by congratulating my hon. Friend the Member for Inverclyde (Mr McKenzie) on his eloquent and passionate maiden speech. Having made a maiden speech myself only two months ago, I can imagine the relief that he is feeling now that he has got through it and sat down, but his speech was excellent. I am also pleased that I am no longer the new boy in the House.
I welcome the equality impact assessment that was published yesterday. I think that some Opposition Members would have preferred it to have appeared a little earlier, but we are none the less grateful for its publication in time for this debate. I also thank other Members who have secured debates on English for speakers of other languages—commonly known as ESOL.
As many Members will know, Leicester is a richly diverse city, and for that reason the changes in ESOL provision are causing much concern in areas throughout the city, including my constituency. Five thousand learners in Leicester, 2,000 of them in Leicester South, have benefited from ESOL provision in the past year, with some degree of fee remission. A total of 1,500 learners were enrolled in the Leicester adult skills and learning service, 84% with fee remission, of whom 75% were not receiving work-related benefits. As the equality impact assessment showed, many of those people are women. That does not surprise me, because when I visit providers, such as Highfields youth and community centre, I am particularly struck by the number of low-income women, usually from Asian or African—particularly Somali—backgrounds, who are benefiting from ESOL provision.
Women have told me moving stories about how they would never leave the house before they went on ESOL courses, but had to wait for their husbands to come home. Other women have told me of wanting to help their children at school. Given that Leicester has one of the highest levels of child poverty in the country, I think that the ability of a mother to help her child at school is vital. As we know, education is the fastest route out of poverty for many of those children.
I have also heard stories of men and women who have moved into work, and even started their own businesses, after taking ESOL courses. As a result of the state’s investment in them, they are now investing in the local economy by employing people. Although I understand that ESOL provision will be maintained for those receiving jobseeker’s allowance and other active benefits, colleges and providers fear that following the cuts they will no longer be able to sustain courses this September.
For example, on the St Matthew’s estate there is a course just for Somali women. Its providers are worried that the course will have to end this September if the Minister does not change his mind. Although I have not met the Minister directly, I know he has met many Members, and I appreciate that he has listened on this topic. In his statement yesterday he made some concessions, such as saying he wanted to provide more support, but there is still a lack of detail, so will Minister say more today about how he expects the new changes he is working on with the Department for Communities and Local Government to develop? Also, will the new scheme be unveiled by September or August?
We talk a lot about community cohesion. Indeed, when the Home Secretary launched the Prevent strategy a few weeks ago she said that this Government would
“do more than any Government before us to promote integration”—[Official Report, 7 June 2011; Vol. 529, c. 53.]
I therefore ask the Minister this: has he discussed the impact of his ESOL changes with the Home Secretary? In cities such as Leicester ESOL is absolutely vital to community cohesion and integration. I am worried that the ESOL changes would not serve to back up the Home Secretary’s grand statement that this Government will do more than any other to promote integration. Will the Minister give us more detail in his summing up, and will he at least delay the changes in ESOL provision planned for this September? If not, I will be worried about the consequences for my constituency.
Madam Deputy Speaker (Dawn Primarolo)
I am looking around at a very quiet Chamber, with no Members standing to indicate they wish to speak.
The Lord Commissioner of Her Majesty’s Treasury (Mr Brooks Newmark)
I begin by thanking the Chief Whip for indulging me this one time by allowing me to speak. As the House is aware, in the Whips Office we take a vow of silence, so I am particularly pleased to be given this opportunity to respond to Members in the area of business, innovation and skills, and to thank everyone for their excellent contributions. I feel a little like Garbo in her first talkie, when the next day’s headlines were, “Garbo Talks”, although when tomorrow’s press reports that “Brooks Talks”, I suspect it will not be about my performance at the Dispatch Box.
I thank the Backbench Business Committee for organising today’s debate, in particular my hon. Friend the Member for Kettering (Mr Hollobone) for organising the format, which I understand from my hon. Friend the Member for Wellingborough (Mr Bone) is known as the Hollobone format, in which there is a rapid-fire series of short debates and short replies—a sort of political speed-dating, in which the Member raises his or her questions and sees whether or not he or she fancies the relevant Minister’s replies. I shall therefore do my best to make the Government as attractive as possible in relation to all the areas covered in the debate.
Before I begin my formal response to hon. Members’ contributions, I congratulate the hon. Member for Inverclyde (Mr McKenzie) on his excellent maiden speech, which was delivered with warmth and a deep understanding of the community he represents.
Let me respond first to the hon. Members for Nottingham South (Lilian Greenwood), for Scunthorpe (Nic Dakin), for Sheffield Central (Paul Blomfield) and for Leicester South (Jon Ashworth), all of whom rightly drew attention to the important issue of English provision to speakers of other languages. I know that hon. Members have previously campaigned on this issue and have highlighted the importance of English language provision to members of their respective communities. I am sure that they will agree that, although the ability to speak English is important to ensuring integration, if employers wish to recruit abroad—I address this point particularly to the hon. Members for Nottingham South and for Sheffield Central—they must not expect the state to pick up the cost of teaching their workers English. The reforms will target public funding to those in the greatest need and will ensure that higher standards are set for providers, thereby making ESOL provision work better for learners, employers, and taxpayers.
I am sure that hon. Members will have seen the second impact assessment, and yesterday’s written statement by my hon. Friend the Minister for Further Education, Skills and Lifelong Learning, in which he further clarified our policy in this important area. Members will be aware that the Department for Business, Innovation and Skills will work with the Department for Communities and Local Government to formulate a strategy specifically to target vulnerable communities and particularly women and families who rely on community-based English language learning to help them gain access to public services and to communicate with their children’s schools. That point has been stressed by all the hon. Members who spoke on this issue. The Government are anxious to ensure that women and families do not lose out on this important provision.
My final point on this issue is that my hon. Friend the Minister for Further Education, Skills and Lifelong Learning has listened to and worked with the Association of Colleges and other key providers to make sure that we make rapid progress in this area—we hope by September when we reconvene—to ensure further and better integration in our communities.
I thank my hon. Friend the Member for Harlow (Robert Halfon), who has demonstrated his lifelong interest in horology and has done much to promote that sector. I particularly appreciate his concerns about horology training facilities in the UK and the need for small, specialist courses, and I agree that we must support specialist British industries such as the watch-making and clock-making industry. I add that, although there is a British watch maker called Newmark, we are not related. My hon. Friend rightly cited the importance of the Government’s internship programme, and I assure him that the Government are exploring the opportunities for the craft sector to engage with the apprenticeship programme. I have met my hon. Friend the Minister for Further Education, Skills and Lifelong Learning to discuss this matter, and he will write to my hon. Friend about the progress that the Government are making to boost craft apprenticeships so that Britain will become the international centre of excellence in horology that he so rightly wants it to be.
On regulation, the hon. Member for Falkirk (Eric Joyce) should be commended for his continued focusing of attention on the behaviour of the Eurasian Natural Resources Corporation, which he has mentioned in this place in the past. I particularly thank him for drawing my attention to the need for greater transparency and good governance, especially for companies dealing with developing countries such as the Democratic Republic of the Congo. The Government expect and the law requires all UK directors of companies to adopt high standards of business conduct. We rightly focus on bad behaviour and we certainly do not condone criminal offences such as bribery or phone hacking. We need to help directors and shareholders through a strong system of corporate governance. Overall, the current system works well but needs to evolve continually to meet new challenges.
I thank my hon. Friend the Member for North Swindon (Justin Tomlinson) for highlighting the importance of having a strong town centre and a vibrant community, as well as for continuing to be a strong champion for Swindon and for mentioning the importance of supporting retailers and small businesses in his area. I agree that having a successful and buzzing town centre helps to create and maintain jobs in shops and offices. A vibrant town centre creates a positive image that attracts new businesses and employment. Indeed, we should applaud the work of independent groups such as Forward Swindon and InSwindon which, in conjunction with the local council, have sought to revitalise growth and prosperity in the town centre.
I thank the hon. Member for Birmingham, Selly Oak (Steve McCabe) for focusing on Lloyds TSB and the sale of flats in the Cube in Birmingham, and for highlighting the concerns of Mrs Shah and other small investors. He raised the inability of flat owners to secure mortgages, and I assure him that my right hon. Friend the Chancellor will be made aware of his concerns.
My hon. Friend the Member for Cleethorpes (Martin Vickers) is right to raise the important issue of Tata Steel and the development of north Lincolnshire. He mentioned the importance of renewable industry in Lincolnshire and the need for improved transport links. The pan-Humber local enterprise partnership has focused on strategic opportunities growth based on renewable energy, ports and logistics, and chemicals among other things. The Humber LEP is bidding for an enterprise zone to support the creation of renewable clusters in the area. I shall of course pursue that matter with the relevant Ministers to ensure that the demands of local people and investors can be met. On Tata Steel, the recent meeting between my right hon. Friend the Prime Minister and Members to discuss the issue was cancelled, and will be rearranged, as is the case with a visit by the Secretary of State for Business, Innovation and Skills. The Prime Minister has expressed disappointment at job losses resulting from reductions at Tata Steel, but he is working hard with my right hon. Friend the Secretary of State for Business, Innovation and Skills to bring a taskforce together to ensure that we do everything possible to mitigate the impact on local jobs and communities.
My hon. Friend the Member for Central Devon (Mel Stride) is right to emphasise economic growth. He mentioned the importance of not driving growth with debt, and the need to reduce unnecessary regulation. Growth remains at the centre of the Government’s strategy, and the growth review will work throughout this Parliament to address barriers facing industry. The Government’s role is to create the conditions conducive to private sector investment and to make long-term choices, not offer short-term fixes. We continue to listen to businesses to understand how to help them.
Finally, on maternity and paternity leave, Government proposals will allow both parents to take an active, caring role while retaining their attachment to the workplace. Our proposals allow more flexibility, because one size does not fit all firms or families. We will work with businesses to help them to adapt to these changes. My hon. Friend made a specific point about national insurance, and I will ensure that my right hon. Friend the Chancellor is made aware of his concerns. Once again, I thank the Backbench Business Committee for arranging this debate, all the speakers for their contributions and wish you, Madam Deputy Speaker, and all Members a relaxing summer break.
Madam Deputy Speaker (Dawn Primarolo)
Thank you, Minister. Before we move to the health debate, I remind Members who are taking part that page 5477 of the Order paper states:
“Members are expected to attend throughout the debate for which they are grouped.”
That includes listening to the Minister at the end of the debate, so it is regrettable that some Members who participated in the debate that has just concluded are no longer in the Chamber. I am sure that the Whips will inform them.
Health
Barbara Keeley
On a point of order, Madam Deputy Speaker. The Minister has just replied to the debate very fully, and I thank him for responding to my points and those raised by other Members. A while ago, however, his hon. Friend the Under-Secretary of State for Health, the hon. Member for Guildford (Anne Milton), was answering a debate in Westminster Hall, ran out of time, and said what Ministers frequently say: “I will respond later to the points with which I have not managed to deal today.” I have received no replies to the questions that I raised on that occasion, and I wonder if you can advise me, Madam Deputy Speaker, on what we can do when Ministers make pledges of that kind and do not follow them up.
Madam Deputy Speaker (Dawn Primarolo)
That is not a point of order for the Chair. However, the hon. Lady has taken the opportunity to make the point directly to the Minister. I am sure that he has heard what she has said, and that he fully intends to reply to the points that have not been dealt with today.
Paul Burstow
I entirely take the hon. Lady’s point. I will certainly ensure that I respond to the questions that I did not cover in the debate, and I will ask colleagues in the Department what has happened to the replies to the hon. Lady’s earlier questions.
Madam Deputy Speaker
I am grateful for the Minister’s assistance.
Communitites and local government
Dr Julian Huppert (Cambridge) (LD)
It is a great pleasure to be able to speak in this debate. I have chosen to speak about an issue that, although it is of great importance in my constituency, is not just a local, parochial issue. Rather, it should concern all of us, because if we do nothing about it, we risk losing a large part of what makes the places we represent unique.
The health and diversity of our town centres and high streets are at risk. They are increasingly dominated by chain stores and businesses that have a national profile. This is now so much the case that it is often difficult to tell different places apart when we go shopping. The phenomenon has been dubbed the “clone town” by the New Economics Foundation.
We are fortunate in Cambridge to have several streets that buck the trend of the “clone town”. One road in particular, Mill road, has been renowned for decades for its vibrant mix of independent shops and restaurants from all around the world, yet not even Mill road is immune to the danger of slowly becoming another “clone street”. A couple of years ago there was a major campaign to prevent Tesco from having one of its express stores there which, sadly, failed. It became Tesco’s 14th store in Cambridge—there are now 15 in Cambridge—and now Sainsbury’s wants to open one of its express stores further down the road.
I do not want to criticise these businesses. They are successful British companies that employ a large number of people, and they did not get where they are by missing opportunities to expand. It is entirely reasonable for them to want to acquire new locations, sell more products and make more profit, but they do cause harm. They drive other shops out of business, employing a range of tactics.
Madam Deputy Speaker (Dawn Primarolo)
Order. May I help the hon. Gentleman? The clock is not ticking down. When he resumes his speech, he will have two more minutes, which will mean he has had his four, without my intervention being counted, of course.
Dr Huppert
Thank you, Madam Deputy Speaker. I shall do my best to comply.
Such chain stores drive other shops out of business, and we need to have some tools available to limit their growth. Local people should be able to find an appropriate balance between the convenience of the familiar and the excitement of the eclectic.
This has been a live issue for a number of years, and Cambridge city council has worked with the Local Government Association and Lord Greaves to table an amendment to the Localism Bill in the other place. This amendment—153AKC, according to the other place’s rather opaque numbering and lettering system—has become known in some circles as “the Cambridge amendment” because of the key work done by Sian Reid, leader of Cambridge city council. It sets out in simple steps how we can give local communities the tools they need. Put simply, the amendment adds to the duties of a local planning authority the requirement to assess the vitality and diversity of local shopping areas. It does not bar specific companies; it does not set targets for the number of independent retailers; it would not, in itself, have any bearing on the current make-up of our high streets; but it would give local communities such as Cambridge the freedom to decide whether a planning application will add to, or detract from, the vitality and diversity of the area. In some areas of the country a Tesco store may increase the viability of the high street, whereas in others, such as Cambridge, it would decrease it. Communities will get the decision they want.
It was clear in the debate on the amendment in the other place that many people shared the concerns I have set out. The question is: what can, or should, be done about it? This does, of course, require people to vote with their feet as well, but I hope that Members on both sides of the House will agree that giving local authorities the right tools to strike the right balance is desirable, and I also hope that the Government will support the Cambridge amendment and allow communities around the country to have more say on their high streets, such as Mill road.
Richard Graham (Gloucester) (Con)
I am delighted to participate in today’s debate. I want to talk about the recent National Audit Office report on fire control centres and the lessons learned. The FiReControl project was introduced to replace 46 local control rooms around the country with a network of nine purpose-built regional control centres using a national computer system. In many ways, on the face of it, Members might have thought that that was a good idea, but the NAO’s report describes the plan as “flawed from the outset”, with “unrealistic estimates of costs”, an under-appreciation of the complexity of IT involved, hurriedly implemented and “poorly managed”, and concluded that at least £469 million will have been wasted.
As many Members will know, the project was doomed to failure but was sadly continued with for a very long time. It is of particular sadness to the people of Gloucester, my constituency, that the tri-service centre—a centre combining police, fire and rescue and ambulance services, which was a model of its kind when it was created only a few years ago and which performed strikingly well during the 2007 floods—was to be replaced by a regionalised fire control centre at Taunton. Despite that sadness and the irony of the then Minister with responsibility for fire services having been my predecessor, I want to discuss the lessons that can be learned from that botched project. There are four particular aspects that I would like the Minister to consider.
The first lesson concerns the plan for regionalisation. Over the past 13 years, we have seen a series of attempts to regionalise our country. That was particularly the case in my constituency with the attempt to regionalise the Gloucestershire constabulary and then the fire control centres. I hope this Government will never again try to regionalise services that are best delivered locally through the long-established shires, cities and districts of our nation.
The second lesson concerns large IT projects, a lesson that has surely been learned time and again by Governments, at least over the past quarter of a century. When IT projects are large and complex, they tend to be beyond the hopes and expectations of Ministers, Departments and the companies implementing them. I hope that our Government will look closely at the issue as we take forward important new projects, such as the single universal benefit.
The third lesson that the Government will want to study concerns project management, which bedevilled the previous Government in relation to Building Schools for the Future, the rising costs of architects’ and consultants’ fees, and the unnecessarily complex procurement mechanisms and processes. In the case of the regional fire control centres, project management was a skill sadly lacking at the top of Government. Again, as this Government look at reducing costs, taking out waste and making government more efficient, I hope we will focus on the most effective project management skills available.
The final lesson in this unhappy saga comes from the role of the Select Committees. It is still not clear to me whether the Communities and Local Government Committee of that time, over the 10 years of the project, firmly identified to Government the error of their ways by pointing out the likely problems at the beginning, where—
Bill Wiggin (North Herefordshire) (Con)
I was privileged to be here earlier, and I congratulate the hon. Member for Inverclyde (Mr McKenzie) on his maiden speech.
I am sorry that the hon. Member for North West Durham (Pat Glass), who was due to speak, has not managed to get here, which is a great shame.
I shall deal with the speeches in the order in which they appear on the Order Paper—
Madam Deputy Speaker (Dawn Primarolo)
Order. I should inform the hon. Gentleman that the hon. Member for North West Durham (Pat Glass) withdrew and is not required to explain why.
Finance (No. 3) Bill
Baroness Primarolo Excerpts(13 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Chris Williamson
I certainly do not support the Budget. Although I acknowledge that Rolls-Royce does some excellent work—we are fortunate, in that it is the largest employer in my constituency and provides huge opportunities for young people—the hon. Gentleman would do well to remember the support given by the previous Government to the aerospace industry. He would also do well to remember that one of this Government’s first decisions was to scrap the loan to Sheffield Forgemasters. I can see that he is screwing up his face and rolling his eyes—
Madam Deputy Speaker (Dawn Primarolo)
Order. I know that the hon. Gentleman was tempted down this line of argument by the intervention, but we are discussing the bank levy.
Chris Williamson
Thank you for your guidance, Madam Deputy Speaker. The point I am trying to make is that the resources realised as a consequence of supporting the amendment and introducing such a tax within the bank levy—or at least exploring the possibility and reporting back on how it might be used—could be used to support opportunities to create new employment for people in Sheffield through Sheffield Forgemasters and to generate more apprenticeships and opportunities for young people. I hope that the hon. Member for Wyre and Preston North (Mr Wallace) will reflect on those comments and join us in supporting the proposal made by my hon. Friends on the Front Bench about considering a tax on bankers’ bonuses.
I was going to talk about the fact that we know that the Government’s economic policies are failing and that the economy is flatlining. Opportunities are not being realised because of the Government’s blinkered approach, if I may put it that way. I ask Ministers to consider this proposal as an additional opportunity to support business and young people and to create opportunities in our country. Realising such aims has been made very difficult for Ministers because of the policies they have pursued.
We hear all the time from Government Members, particularly the Chancellor of the Exchequer, that we are living in austere times, that we all must tighten our belts and that we are all in it together. As I have said, the amendment provides an ideal opportunity for the Minister and for Government Members to demonstrate that they mean what they say when they make comments about all being in it together.
Kerry McCarthy (Bristol East) (Lab)
I beg to move amendment 12, page 45, line 5, at end insert—
‘(2) The Schedule shall not come into force except as specified in subsection (3) below.
(3) The Chancellor of the Exchequer shall bring the Schedule into force by order within six months of the passing of this Act.
(4) A statutory instrument containing an order under subsection (3) shall be accompanied by a report which details—
(a) any effective subsidy provided to, or additional profits accruing to, operators of existing and new nuclear power stations as a result of the provisions in the Schedule;
(b) the immediate impact of the provisions in the Schedule on consumers and on fuel poverty;
(c) the immediate impact of the provisions in the Schedule on energy-using manufacturing industries and on employment in those industries;
(d) the expected effect of the provisions in the Schedule on investment in new renewable power generation and on investment in new nuclear power generation;
(e) the measures that the Chancellor intends to adopt in a future Finance Bill in order to recoup any effective subsidy to or additional profits accruing to the nuclear industry as a result of the Schedule; and
(f) how the monies raised by those measures will be used to mitigate the immediate impact of the Schedule on consumers and on manufacturing industries and to encourage green investment.’.
Madam Deputy Speaker (Dawn Primarolo)
With this it will be convenient to discuss amendment 21, page 45, line 5, at end insert—
‘The Schedule shall come into force on a date specified by the Treasury by an order made by Statutory Instrument, which may not be made until an agreed packaged of mitigation measures for energy-intensive industries has been laid before the House of Commons and approved by a resolution of the House of Commons. The dates specified in paragraphs 8(3) and 9(5) of the Schedule shall be replaced by the date specified in the order under this section if it is later.’.
Kerry McCarthy
Let me start by confirming that Labour Members support the principle of a carbon floor price. We believe that carbon price support could be an excellent opportunity for the UK in providing a high and stable price for carbon. It could encourage investment in low-carbon power and green technologies, create a new generation of green high-skilled jobs which the UK sorely needs, enable the UK to make radical reductions in its carbon emissions, and contribute to meeting our carbon budgets. Unfortunately, however, we cannot support the way in which the Government have implemented this measure. It will hit those who can least afford it, damage the prospects of developing a UK green industry, and fail to reduce carbon emissions. We have to question whether we can call the carbon price support rate a green tax at all.
First, I shall deal with the impact on consumers. We know that people are struggling to pay their fuel bills. The OECD estimates that, on May’s figures, energy prices are nearly 10% higher than they were a year ago. Scottish Power recently announced electricity bill rises of 10% and gas bill rises of 10%, and other companies are expected to follow suit. The Government are not helping. Rising energy bills and fuel bills are coming on top of higher taxes, cuts to tax credits and cuts to public services. This year the Government have cut the winter fuel payment by £50 for people over 60 and £100 for people over 80, with no mention of that in the Budget statement or the pre-Budget report. That comes after their promise in last year’s Budget to protect key benefits, including winter fuel payments, for older people. They may claim that they inherited this from the previous Government, but we could and would have looked again at that decision in the light of rising energy prices, and so could they; that is the point of having an annual Budget statement.
These are the circumstances in which the Government have proposed a carbon floor price designed in such a way that it will cost working families by raising their energy bills. We understand that in the long term, if the policy is designed in a way that encourages a switch to low-carbon energy production, there should be no significant effect on consumer bills—that is why we support the principle of the carbon floor price—but right now, in the short term, there will be price rises for consumers at a time when they are already finding their fuel bills unmanageable. The Government have not included any counterbalancing measures to help working families to deal with those price rises. If the measure goes ahead in the form that the Government propose, between 30,000 and 60,000 more households will fall into fuel poverty in 2013, rising to between 50,000 and 90,000 more households by 2020. Those are the Government’s own estimates. Earlier this year, Consumer Focus said:
“In its current form there is a real risk that this policy may simply displace detriment.”
In other words, even if it did have a positive impact on green investment, that would be at the cost of more people falling into fuel poverty.
There have recently been somewhat hysterical reports about green taxes, alleging that they are the biggest factor in causing consumer bills to rise. That is not true. Ofgem figures from March show that environmental and social costs make up just 8% of the typical dual fuel consumer bill, and that has risen by just one percentage point since 2008. Climate change deniers cite figures suggesting that hidden green taxes add some £200 to energy bills, but those figures do not stack up. That does not mean, however, that now is the time to add to those costs. The Government have got it wrong. Ordinary working families were clearly the last thing on their mind when they designed this policy. That is why the amendment calls for them to look again at the effect that it will have on people in fuel poverty.
I turn to manufacturing, which several of my colleagues will wish to discuss too. Rising energy prices will affect not only consumers but firms that employ thousands of people across the country. In particular, they will hit energy-intensive industries such as steel, aluminium and chemicals. There is a danger, particularly in the absence of a credible Government plan for growth, that growth and jobs will be exported to other countries. According to a report by Thomson Reuters Carbon Point earlier this year, the carbon floor price will impose additional costs on businesses amounting to £9.3 billion. We understand that that effect might be mitigated in the long term if there is a switch to greener sources of energy, although that is not certain given the problems that I will come to in a moment. In the medium term, however, UK industry will be at a disadvantage, and jobs and growth will be put at risk. That is why the director general of the CBI and industry bodies such as the Chemical Industries Association have called for an exemption from these extra costs for high energy-using industries.
Concerns have been expressed by firms such as Tata Steel, which employs 1,000 people in Teesside. Its chief executive officer said:
“The introduction of the carbon floor price represents a potentially severe blow to the sustainability of UK steelmaking.”
Rio Tinto Alcan, an aluminium producer in the north-east, may close, shedding 600 jobs, and 1,800 jobs are at risk at INEOS ChlorVinyls in Runcorn. Some of the industries threatened by this measure are not only major employers but among the UK’s biggest export sectors. For example, the chemical industry, which accounts for 12% of total UK manufacturing, exports the bulk of its production, with a trade balance in 2008 of nearly £6 billion.
There is also the danger that we will harm our own prospects of building a UK green industry. This sector represents huge opportunities for the UK. For example, the wind energy sector provides over 10,000 jobs, and it expanded by 91% in just two years from 2007 to 2009. The solar energy industry in the UK provides over 10,000 jobs. There is a danger that we may not be able to sustain these sectors in the UK, despite any efforts from the Government, if the necessary materials are not available here. This would be yet another own goal for the “greenest Government ever” after their ill-thought-out change of policy earlier this year on feed-in tariffs, which has put thousands of green jobs at risk. The solar sector is a vital, nascent green industry in the UK. Until the Government’s announcement, the 10,000 jobs that it currently supports was expected to rise to 17,000 this year. The Government’s promised green investment bank was supposed to boost investment in new green industries, but it has been watered down: it will be a fund, and not a real bank, until 2015. That makes a mockery of the Government’s green credentials. Our amendment calls on the Government to look again at the carbon floor price and its effect on high energy-using industries. This is the wrong time to put jobs and green investment at risk without a plan to protect them.
I now move on to the impact on green investment. We accept that a well-designed carbon floor price can deliver reduced emissions and higher green investment, which is why we support the idea in principle. However, we doubt whether the Government’s proposal will deliver those goals. The UK is part of the EU emissions trading scheme, so any carbon permits that are not sold in the UK will simply be sold elsewhere in Europe. The Department of Energy and Climate Change commissioned Redpoint Energy, a consultancy, to examine the options for a carbon floor price. It said in a footnote to its report:
“Under the EU ETS, it would be expected that lower emissions from the GB electricity sector in a given year would be offset by higher emissions elsewhere within the trading scheme.”
A recent report by the Institute for Public Policy Research agreed that
“this policy would have no direct effect on emissions reaching the atmosphere.”
It went on to say that
“it is important to be clear that the UK would be meeting climate change targets in a way that has zero direct effect on emissions.”
The Treasury’s own consultation document admitted that for power stations covered by the ETS, the carbon price floor will not directly impact on the Government’s ability to meet their carbon budgets.
Consumers and companies facing higher energy bills because of this policy would be right to question whether this is a worthwhile use of their money. Will the Government’s policy encourage more investment in renewable power? The Energy and Climate Change Committee expressed doubt:
“when it comes to low-carbon investment, the effect of the Carbon Price Support will depend on the confidence of investors in the long-term reliability of the Carbon Price Support.”
Andrew Percy (Brigg and Goole) (Con)
I am encouraged by what I think I am hearing about the European Union. My policy would be simply to leave it. Is it now the policy of the Labour party to cut the EU budget? If so, why did it not seek to negotiate a reduction in the EU budget when it was in power?
Madam Deputy Speaker
Order. Perhaps we can stick to this debate. If the hon. Gentleman wants to know the answer to his question he can discuss it privately with the hon. Lady outside the Chamber. We should return to the important issue of climate change.
Kerry McCarthy
I have touched on the fact that there needs to be greater Government engagement in Europe to try to deal with the matter at a pan-European level.
I turn to the nuclear subsidy. As I have said, the carbon price support rate will hurt families and industry in the immediate future, yet it seems likely to fail to reduce carbon emissions. We have to wonder why the Government decided to implement it. The obvious explanation is that they got it wrong, again. It would not be the only tax that they have bungled in this Finance Bill. I have already mentioned the difficulties over the fuel duty stabiliser and the North sea oil tax, which was—[Interruption.] Sorry, I have been thrown off slightly by a sedentary heckle from the Economic Secretary. As I was saying, the Government introduced a last-minute supplementary charge on North sea oil in response to growing public protest about prices at the petrol pump. We have subsequently seen how ill thought out that was, and it has led to the Government having to perform U-turns at a fairly rapid pace.
One explanation of why the Government want to introduce the carbon price support rate is the money that it will raise. Is it perhaps a revenue-raising measure in disguise? The 2011 Budget report reveals that it will raise £740 million in 2013-14, more than £1 billion in 2014-15 and £1.4 billion in 2015-16. If it fails to encourage faster green investment, as some predict, the tax could go on to raise much more as the carbon price approaches £70 a tonne. In fact, the Budget report states explicitly:
“The decisions the Government is taking to strengthen the tax system—including…the introduction of the carbon price floor announced at this Budget—will also help to support the long-term sustainability of the public finances.”
Finance (No. 3) Bill
Baroness Primarolo Excerpts(13 years, 4 months ago)
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Lorely Burt
I must confess, somewhat ashamedly, that I have also seen Jeremy Kyle’s show and the advertisements that accompany it. I want to pick up on the fact that Labour Members do not feel it appropriate to meet short-term loan companies. I do not tweet, but it is my understanding that the hon. Member for Walthamstow (Stella Creasy) says that Wonga has refused to meet her. That is not the case, however. [Interruption.] This is my understanding; I am just going on a letter from Wonga, and I do not want to get involved in the dispute. My point is that we must fully understand the situation. The hon. Lady knows it intimately; I do not deny that.
Madam Deputy Speaker (Dawn Primarolo)
Order. This is supposed to be an intervention, not a speech. I call Jenny Chapman.
Mrs Chapman
I am unclear as to the point that was being made, but I recommend that the hon. Lady follows my hon. Friend the Member for Walthamstow on Twitter, as she might therefore become more familiar with my hon. Friend’s efforts to secure meetings with senior officials at Wonga and might also understand the frustration felt by Labour Members. It is frustration not only with the high-cost lenders, but with the Government too. Five months ago, the Backbench Business Committee initiated a positive debate on this issue, but there has been no movement since then—no announcements and no indication that something is in the pipeline. That fosters a great deal of frustration and a lack of trust among Opposition Members.
Nigel Mills (Amber Valley) (Con)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dawn Primarolo)
With this it will be convenient to discuss the following:
New clause 14—Group filing for corporation tax—
‘The Chancellor shall direct the Office of Tax Simplification to report by 31 March 2012 on the potential for the introduction of a consolidated corporation tax filing for UK-resident companies meeting the current definition of a group for corporation tax purposes, to include an assessment of the potential cost savings for companies and HMRC, and the potential for reducing tax avoidance.’.
Amendment 15, in clause 4, page 2, line 16, leave out ‘is treated as having come into force on 1 April 2011’ and insert
‘shall come into effect when legislation shall have been enacted requiring that all public limited companies registered in the United Kingdom shall be required to submit the arrangements for the payment of salaries and bonuses of their directors to a binding vote of approval by their shareholders at an Annual General Meeting.’.
Amendment 20, page 2, line 16, leave out ‘is treated as having come into force on 1 April 2011’ and insert
‘shall come into effect when legislation shall have been enacted requiring all public limited companies registered in the United Kingdom to publish the current salaries and bonuses of their directors.’.
Amendment 51, in clause 7, page 4, line 6, at end insert—
‘(10A) The Chancellor shall produce, before 30 August 2011, a report on the Government’s discussions with the industry on the implementation of the increased charge’.
Amendment 17, in clause 42, page 27, line 4, after ‘appoint’, insert
‘after a Report has been submitted to the House of Commons detailing the number of EIS schemes previously approved, their total cost in terms of tax relief, the number of jobs created by the companies enjoying such relief and the number of companies that failed subsequent to relief being granted allowing for an estimate to be made of the cost of each job created under the terms of this scheme when compared to the cost of tax relief given.’.
Amendment 9, in clause 43, page 27, line 35, at end insert—
‘(11A) In section 1052 in subsection (2) after paragraph (a) insert—
“(e) incurred on premises costs
(f) incurred on design costs
(g) incurred on patent, trade mark, registered design, copyright, design right or plant breeder’s right (see section 1139)”.
(11B) After section 1142 add—
“1142A Premises costs
(1) In this part “premises costs” means rents and business rates costs of the studio where R&D is undertaken.
1142B Design costs
‘(1) In this Part “design costs” means—
(a) user interface costs,
(b) user testing costs,
(c) aesthetic costs,
(d) new business model costs.
(2) In subsection (1)(a) “user interface costs” means—
(a) costs occurred from designing the visual and functional appearance of the application,
(b) costs occurred from designing the code that reacts to user inputs.
(3) In subsection (1)(b) “user testing costs” means—
(a) costs occurred during product testing.
(4) In subsection (1)(c) “aesthetic costs” means—
(a) costs occurred from the artistic design of the product.
(5) In subsection (1)(d) “new business model costs” means—
(a) marketing of building a new business monetisation model,
(b) marketing of testing a new business monetisation model.”’.
Nigel Mills
The aim of new clauses 12 and 14 is to encourage the Government to move a little faster in simplifying our corporation tax system, which is far too complex to meet modern needs.
On a day on which we have celebrated the 100th birthday of Ronald Reagan, it is appropriate to start with a quote from that great tax reformer. He said in 1985:
“Later in this session of Congress, we’ll be presenting our proposals for tax reform that will lower tax rates, broaden the tax base and make the tax code simpler and fairer. We’re looking at a top rate on personal income taxes of 35 percent, very possibly less. And we’ll be sure that incentives for capital formation are maintained. And I just want to reemphasise one thing: Tax reform will not be a tax increase in disguise.”
Those words are as relevant today as they were 26 years ago. To be fair, the Government have received that message. The Exchequer Secretary recently said:
“Taxation in Britain is far too complex. A clearer and more straightforward tax system will bring benefits for tax payers, tax professionals and the Government alike.”
I hope that the whole House would entirely agree with those sentiments.
The Government have taken welcome steps in the right direction. We have established the Office of Tax Simplification, and I commend the work it has done. In fact I am keen to ensure that we get maximum value out of it by giving it a bit more work to do under these two new clauses. At a time when we are assessing the value of all our quangos and outside bodies, the more work we get out of them the better.
We need to hasten the work of the OTS along. We are already a year into this Parliament and we rightly have a process now whereby we consult in detail on major changes to the tax system. If we do not bring forward our proposals in the next year or so, we will struggle to get any benefit from them in this Parliament, and that is the direction in which I am encouraging the Government to go tonight.
The Exchequer Secretary has made such a great start in tax simplification that he has had the honour of being named the tax personality of the year. We could start making various jokes about accountants’ personalities, but we would probably cause grave offence to all my former colleagues, so perhaps we should leave that subject. We have had a consultation on removing a few simple tax allowances, such as the reliefs for angostura bitters and black beer—if going that far gets the Minister that award, just think what garlands could be thrown at his feet if he tackled some of the real complexities of our tax system!
It was just last week that the Government announced the next areas that they want the OTS to consider, rightly including the taxation of pensioners and employment taxes. However, at a time when we need business to drive the growth that will sort out the deficit and our economy, we need to look at the taxes that encourage—or perhaps discourage—business from making the investment that we need. That is why new clause 12 would require the OTS to consider ways to simplify the capital allowance system, or to replace it if simplification is not possible. If the Minister questions why we need that provision, I draw his attention to the Bill, in which we have had to introduce various measures that tinker with the capital allowance system, because we know it is out of date and not working. It is hard to imagine that anyone would design from scratch a system in which we have to introduce a modification to ensure a different system for short-life assets and then we have to change the definition of short-life assets to eight years. I wonder how often businesses invest in assets that they expect to have a useful life of eight years, never mind any longer. That is a clear sign that the system is not working, out of date and far too complex. It needs to change.
I am sure that Members have taken a fascinating look through this country’s tax code and seen how many types of capital allowances we now have. We have a basic regime—the general pool—which from next year will produce an allowance on a reducing balance basis of 18%, meaning that it will take a long time for a business to get the full economic relief for its investment. It would take well in excess of six years to get the majority of that relief. We then have the short-life asset pool for assets that a business thinks might have a life of less than eight years. That effectively means that it has to track those assets and work out when to scrap or dispose of them to get the final balance. We also have a long-life asset regime for assets that have a particularly long life, but which are not suitable for the general pool. Furthermore, we have different rules for cars and environmentally friendly assets, and completely different rules for assets on a finance lease, where effectively we allow account depreciation.
This range of reliefs for simple investments in plant and machinery beggars belief. Frankly, if I was an overseas business or someone with some cash wanting to start a business in the UK, and if I wanted to invest in a heavy manufacturing business, was investing in large numbers of plant and equipment and went to my adviser and said, “I want to invest in the UK. Can you tell me how I get relief for all this investment?” and I got the answer, “Well, it depends on whether it’s a long-life asset, a short-life asset, an ordinary asset, an environmentally friendly asset, and it depends whether you lease it, hire purchase or buy it outright”, I would start to wonder whether it was really worth the effort. Surely there must be a simpler and better way of doing this than having to go down all these different routes.
We know what happens. The system creates complexity for businesses having to track and make all these returns. Then the Revenue has to audit and scrutinise those returns and ensure that everything is done properly. It therefore takes work on both sides to support a system that I suspect is achieving the opposite of what we want, which is to encourage existing and new businesses to invest in new, modern and environmentally friendly equipment, and to create more jobs in the manufacturing sector that we so value in this country.
The Economy
Baroness Primarolo Excerpts(13 years, 5 months ago)
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Nadhim Zahawi
On a point of order, Madam Deputy Speaker. Should not the hon. Member for Rhondda retract the disparaging remark he has just made about the Chancellor?
Madam Deputy Speaker (Dawn Primarolo)
Nothing has been said that is unparliamentary, but some of the behaviour in the Chamber could be a little better than it is currently. That is not a point of order for me, but a matter for each Member of the House.
Mr Osborne
John Hutton said that he would like the leader of the Labour party
“to endorse the report I produced, yes, because I think it does strike the only fair balance”.